ClubCorp takes $265M swing at resurgence in golf

The operator of more than 150 private clubs across the nation is planning to acquire one of the country’s fastest-growing golf companies.

Dallas-based ClubCorp(NYSE: MYCC) announced Aug. 13 that it will buy Newnan-based Sequoia Golf Group LLC for roughly $265 million.

The deal would make ClubCorp a dominant player in private clubs in Georgia — growing its portfolio from eight to 35 properties in the state. It already owns The Country Club of the South, The Commerce Club and Buckhead Club, but would add upscale golf courses including The Manor Golf and Country Club, White Columns Country Club and Atlanta National Golf Club.

“The grouping of clubs here is just outstanding,” Mark Burnett, chief operating officer for ClubCorp, said in an Aug. 13 call with analysts. “It complements so much of what we already have.”

The deal is a leap of faith in the resurgence of golf, which took a big hit during the Great Recession, when people tightened their purse strings amid the economic turmoil. Several popular golf courses, country clubs and resorts fell into foreclosure and continue to falter.

The sport still seems to have a rocky future. The National Golf Foundation recently reported that about 400,000 players left the sport last year.

But Sequoia contends that it operates in the “20 or 30 percent of the industry that is vibrant and growing,” said President and CEO Joe Guerra, adding in 2007 the average member at Sequoia was playing 46 rounds of golf per year. In 2014, that number has climbed to 56 rounds.

“We are definitely experiencing a resurgence or recovery in the private club business as it relates to golf,” he said, adding well-to-do families “are gravitating back to the country club lifestyle. They want that experience for their kids.”

The acquisition overall would boost ClubCorp’s private club count by 31 percent, from 150 to 209. Broken down by type, it increases ClubCorp’s golf and country club portfolio from 108 to 157, and its business, sports and alumni clubs from one to 52. The deal is expected to close in ClubCorp’s fiscal fourth quarter.